Publish names of contractors that violate integrity policy: Duncan

The federal government should publish the names of all companies that get federal government contracts despite violating the government’s integrity policy, says NDP Public Works Critic Linda Duncan.

“They should list all the ones who are in noncompliance or who have violated their integrity provisions,” Duncan said in an interview Wednesday with iPolitics. “Then the government can be held accountable for continuing to give contracts. The public can scrutinize it and frankly, other competitors.”

Under the government’s integrity provisions, which were beefed up last year, companies can be barred from winning federal government contracts if the company or a member of its board has been found guilty of a number of offences including money laundering, participation in organized crime, income tax evasion, bribing a foreign public official or drug trafficking.

But Public Works and Government Services Canada told MPs Tuesday that three companies benefitted from a “public interest exemption” and received federal government contracts in the past six months even though they had violated the government’s integrity policy. Under its policy, the government can grant a public interest exemption to a company in cases of emergency, national security, health and safety, economic harm or when only one person or company is capable of performing the contract.

Wednesday, the department revealed the names of the three companies that benefited from that exemption since November 2012. All three have been convicted in the past for price fixing.

Oil company Ultramar was awarded a contract “because it is the sole distributor of fuel in a remote region in Northern Quebec,” wrote Lucie Brousseau, spokeswoman for PWGSC.

In 2008, Ultramar pleaded guilty in Quebec Superior Court to fixing the price of gas in Quebec following an investigation by the federal competition bureau and was fined $1.85 million.

A contract was also awarded to Hoffman-LaRoche (Roche Diagnostics) “for equipment to perform a specialized quantitative test that is otherwise not available.” In the late 1990’s, Hoffman-LaRoche was charged with being part of an international cartel that had been fixing the price of vitamins. It was fined $500 million, one of the largest antitrust fines in recent history.

The third exception was made for Air Products Canada “the only supplier of liquid nitrogen,” said Brousseau. In 1996 Air Products Canada was among several companies fined for price fixing.

While the department revealed the names of the three companies Wednesday, Duncan said the government should make it public every time it grants a public interest exemption to the integrity policy.

“Do they reveal what the public interest rationale is when they allow them to keep doing the work,” Duncan said in an interview Wednesday with iPolitics. “That should be posted publicly and let the public decide if that’s in the public interest. Or have an independent body or something making the decision it is in the public interest.”

Under the procurement integrity policy, new contracts signed by Public Works, which does 83 per cent of the federal government’s procurement, now include a clause allowing the government to terminate a contract for default should a company violate the integrity policy. However, it is not retroactive. Companies that already have contracts with the government get to keep them, although officials told MPs Tuesday that those companies come under more careful scrutiny and controls.

To date, however, no contracts have been terminated for default, Brousseau said.

Duncan said she is bothered by the fact that no contracts have been terminated and companies that already have contracts are allowed to keep them.

“That’s the whole part that I find really troubling, where they say we’ve got a contract and so we’ve got to live up to it.”

Duncan said companies should also be disqualified if they have been convicted in the past and have not informed the government.

“There should be a provision in every contract that if you have been convicted previously and you have not informed us, this contract will be considered null and void.”